Meet the Experts

Meet the Experts panel, sponsored by S&P Global. Panelists include Anne Lester, former JPMorgan Asset Management Head, and Matt Reiner, Managing Partner & Senior Investment Advisor. Moderated by Brian Wallheimer, Editor-in-Chief of Financial Planning.

Transcript :

Brian Heimer (00:07):

All right, we will get things started here today with our Meet the Experts Panel. As Justin said, I am Brian Heimer, I am Editor in Chief of Financial Planning, and with me today is Anne Lester. She is former Head of Retirement Solutions at JP Morgan Asset Management. Did I get that right, Ann? You did. We are just discussing that. And we have Matt Reiner, who's Managing Partner and Senior Investment Advisor at Capital Investment Advisors. Thank you both for joining us today.

Anne Lester (00:32):

Thank you. Thank you.

Brian Heimer (00:33):

Awesome. Well, we have had some wonderful ideas shared today, some great sessions. Appreciate everyone coming out and listening in for a little while. 

Brian Heimer (00:46):

I went. Okay. Yep. Hold it. Close your mouth. I want to invite people to come and answer, ask questions as well. If anyone wants to join in, I am going to ask a few questions to start off, but please feel free to step forward. We will give you a mic, we will get you up here, ask you some questions from Anne and Matt, this is a tech conference and we were talking a lot about tech as solutions and ways that advisors are using tech today. So I wanted to just start off with where do you see Tech in Wealth Management today? What sorts of pain points is it addressing and what are some sort of the positives that we are seeing right now when it comes to wealth management and tech in 2023?

Anne Lester (01:27):

Why don't you take the away? Sure. Thanks. So I am going to speak a little bit from my former role as Head of Retirement Solutions, where we did a lot of work with tech, with big data, with analysis, and also in my current role as a board member for a FinTech firm, smart USA, as well as sitting on the board of a private equity company that has a lot of tech investments. So I am seeing a lot of the landscape, and I guess I see it in a couple of different dimensions. One, I think it enables us to understand a lot more about the people we are trying to serve. We can do some very sophisticated analysis now of things like cash flows, behavior. We can do it at a meta level and then extrapolate back to the individual to build more robust solutions, which is what I used to do in my old job.

(02:13)

I think there's the opportunity to build much more scalable solutions for things like multi-plan employer plans or PEPs pulled employer plans in the 401 K space to drive down record keeping costs. And I think from where I sit, making 401 K plans more accessible to more people and driving down the costs across the board, but particularly in record keeping, I think is just going to be nothing but a value add. And along the way, those same technology tools can enable not just lower cost, but I would argue a much better solution than we currently see today with more personalized investment recommendations. So for me, I think we have barely started seeing some of the ways we are going to see that sort of flowing the backend system. And I think in the front end systems as well, in the way we create user interfaces and develop personalized custom solutions that are much more aligned with outcomes for individuals.

Matt Reiner (03:14):

And I will come at it from the investment advisory side and from an investment advisor. And I think that what it's doing is creating a lot more efficiencies and scalability for firms to enable us to spend more time with people. That's been something that we talk about a lot is that technology is not going to replace the human, but to work alongside the human to allow us to do what it is that we do best, which is helping families reach retirement and have a successful retirement in that standpoint. And I think that there's still opportunity. There's so many solutions out there, which I think is phenomenal, and I think that gives everybody an opportunity to choose a specific solution that meets them and their firm at the stage that they are. But I think that there still is a opportunity to get deeper with integrations. I think that they, integration still means single sign on or access to different numbers, but the actually eliminate processes or tasks within processes, we are just not there yet, which we will talk a little bit about ai, but I think that there's a massive amount of opportunity for that that is still not there, and we are just getting more solutions, which is actually draining time.

(04:26)

And I think the opportunity is on creating more time and out of the weeds and that's what we need to get to.

Brian Heimer (04:32):

Sure. Matt, you touched on AI. We are talking a lot about these revolutionary technologies. We are talking about AI, we are talking about Chat GPT. Where do those fit today in the wealth management landscape and what do you see as opportunities for the future?

Matt Reiner (04:49):

Yeah, I mean, I think AI is a trendy word. Any WealthTech firm that wants to get some publicity will use it in their marketing. But I think that right now we are just in the very, very early innings. I think we are still in the preseason if we were kind of thinking about sports analogy with ai. And we leverage AI in Chat GPT every single day in our firm. And we are doing it based on a surface level though we are doing it from a content creation, we are doing it from a analysis of sentiment analysis and analysis of emails and helping our teams and our younger teams create systems and strategies and utilizing the information and the insights that we already have from blogs or videos or podcasts to be able to use that information to help create further more content or communications with clients in terms of responses to questions, which helps to cut down time on customer service as well.

(05:42)

So we are able to eliminate time from a content creation, from a marketing standpoint. And we are also able to lower response times from a client servicing standpoint because we are utilizing data and insights that we have already created from our team, whether it's our investment committee or our marketing team. And I think that the one aspect that I think seems scary to people is that they go in and they say, well, I don't want to use, it's going to sound robotic or it's not going to be personalized, but I think that AI gets you 80% of the way there. It eliminates a lot of the challenging part of what do I write about? What does my end persona or end prospect or end client want to hear and what are some ideas and how can you formulate that and then allow me to go edit it and do 20% of it to personalize it, make it a little bit mine and differentiate it as well. And I think that that's where AI is going right now. And I think that the challenge for the industry is the openness and the ability for us to accept something so unique and different, which we have always been slow to adopt. And I think that the opportunity though with the ability to analyze all the data is truly exponential in game changer for firms.

Anne Lester (06:52):

And I will just say as someone who's focusing on content creation now, I think there's some really intriguing opportunities to cast a much wider net in terms of the inputs that you are using for your creative process. I think I am maybe a little more skeptical than you are about creating something really differentiated. I mean, I still think that's going to require a creative person to create a unique hypothesis or to frame things in a way that are going to be more compelling. But I do think if I think about in my old role, or even today, you want to come up with a summary of the important macroeconomic points for the last quarter. You would in the old days have an analyst kind of scrape a bunch of stuff off of the web or off of economic reports and sit there and type them up, and then you would have to do something with that. And I think that analyst can now be doing something a lot more interesting in value add and maybe able to generate more creative ideas than just writing what was basically a book report. Let's use AI for that.

Matt Reiner (07:56):

Yeah, I think that there's a lot of validity there. And I think if you think about the early days of social media, right? Social media, there's a lot of unknown, but it created this role of how it creates social media marketing and creative roles of marketers having to rethink and create new opportunities and new jobs. And I think that that's what chat GPT and AI is going to do. Because to your point, yes, if we use it in a similar way, everybody's going to, there's be no uniqueness in content creation or in marketing plans, but if we then can create a new role because there is different ways to prompt it, different ways to train it, different ways to learn from it, then now your thought process isn't just how do you write the content? How do you get something that can go in search millions of pieces of content to bring back? And how do I prompt that in a unique way that's differentiated, right? And how do I then leverage that

Anne Lester (08:43):

Ask? You need to ask it better questions.

Matt Reiner (08:45):

Well, we have to then turn our phrase from how do we ask questions? And I think that that's an important thing in the general industry as well.

Brian Heimer (08:54):

We are talking about a lot of positive ways that tech can have an effect on wealth management, but are there any places right now where tech is getting in the way, any places right now where tech is doing the opposite of what we want to do when we are talking about, I think you mentioned earlier about saving time, these sorts of things. What are some of the roadblocks right now that tech's causing and how do we get past those?

Matt Reiner (09:16):

Yeah, I mean, I think that the biggest one right now, and we started a wealth tech company, which we recently closed down, but I think that right now everybody wants to be the portal. Everybody wants you to go to their system. And I think that that's one of the biggest challenges that we face is that the landscape's going to continue to grow and everybody wants to own the data and not really work together. And then we are going to have a hundred places we have to go as opposed to really solving the true problem of creating one central location. Everybody wants to be that one central location. And I don't know if there's yet enough true deep connectivity amongst the firms to help put the client who is the advisor or the firm at the center of it. They're solving for what's in it for them, which they want to own the data, they want to own the eyeballs. And I think that that's going to be the major challenge that's going to continue to stifle the ability to get that option.

Anne Lester (10:11):

One thing I've thought for years, in fact, and I guess I put my money or my time where my mouth is and joined a firm that sees the same opportunity, is

(10:22)

It's the guts of the plumbing and basically building the invisible connections between all of these separate platforms that I think the real opportunity lies, at least in the short term, to transform experiences, but also to make things much quicker and much less expensive. So I think about it as focusing on plumbing, which is really boring and often hidden. And it's not the sexy interface, and it's not the whizzbang algorithm that's going to calculate the whatever, it's the plumbing that's going to connect all these disparate parts. And I think that is a radically overlooked space because still to this day, so many different firms are operating on really antiquated record keeping platforms and exchanging information and really, really suboptimal ways, let's say. That's a polite way to say it. So figuring out ways to facilitate that information transfer and be the interface between the many to many problem that I think still exists is certainly one quick way you can immediately start affecting change.

Matt Reiner (11:21):

Which highlights, I think the major issues that there's no central body that's trying to help with that because everybody is playing for the same end goal of owning that system and there's not enough communication and deep enough to create the true plumbing that's necessary. I think for that, I think that becomes a challenge.

Brian Heimer (11:41):

I know everybody's got to drink in their hands. Everybody's having some great conversations. Is there any other questions from the audience before we wrap up here?

Anne Lester (11:49):

Yes.

Brian Heimer (11:57):

Let's get your microphone.

Audience Member 1 (11:59):

The idea of a Chat GPT or artificial intelligence, I am a Lawyer and a Financial Planner, and I just see that, you know, ask instead of having an associate do a memo, you ask Chat GPT, it's not getting there, but at what point will somebody be able to say, give me an estate plan, give me a portfolio rebalance. I mean, that seems to be on the horizon. And if you agree with that, what do you think are the impacts of what we are going to be? Are we going to be choosing different algorithms or how do you see that playing out?

Anne Lester (12:49):

So as a former investor and somebody who was trying to design systems and rules-based programs to do this more efficiently, I guess one way I always frame these things is are we in search of the best or are we in search of an improvement? And if I look at rebalancing model portfolios on a platform right now, many platforms, or at least when I left a couple years ago, we are doing two trades a year because they couldn't handle the rebalancing for how many millions of accounts and all those little trades. So if we can just make that once a month, right, already, you are in a better paradigm. I am not worrying yet about replacing the person who's got the idea about the right asset allocation to take today, as much as I am about an efficient way of implementing all those trades with as little friction as possible and having it be so inexpensive enough to do it with an appropriate level of frequency, I would argue twice a year is not, I think we are already using technology pretty heavily to help,

(13:56)

If not trigger trades, at least formulate them. And a then you have sort of a, does this make sense question? I am quite mindful of speaking of lawyers of that poor guy who submitted a brief based on AA without reviewing it, which I mean, my gosh, there was stupid thing number one. But also I've got a book coming out next year and we have been going around trying to find a book title. So I thought, well, that's something I should be popping into Chat GPT. Let's see if it comes up with a book title for me. And I have to say, it came up with a hundred ideas and they were all what I would call clickbait ideas that are the same titles you see on social media, which drive eyeballs, but aren't anything that I wanted for my book title. So I do think a question is, as we train AI to give us what we think will achieve our ends, we have a obligation to think about what ends are we trying to achieve.

(14:50)

Because if it's eyeballs, any cost in a social media context, I think we really run the risk of absolutely a homogenous and kind of lowest common denominator. 10 best ways too. I mean, how many headlines do you see that? So they sell for a reason, that's because people like them. But I do think that we run the risk of spiraling down into an ever diminishing set of ways of describing ourself because you are just going to keep getting the affirmation from the bot. So I do think we need to be careful about some of this too.

Matt Reiner (15:25):

And I already think that we are using it in a legal standpoint. I know there's a couple companies out there that are already doing it to analyze legal documents to help people better understand them. And I already, I know of a firm that has used it to draft up an initial draft of some not deep trust documents and stuff of that nature, but maybe a typical terms of use document or something of that nature. And of course they don't take it verbatim like that one example, but they use it as again, the 80%, the initial draft. So I don't think we are that far away from it. I actually think that there's already use cases that it's being done for that and which then ask the question, well then for lawyers, how does their job run? And I think it's to be used in more dynamic and extravagant ways, but also they can now maybe serve more people. It does also create access and more access to more people.

Anne Lester (16:14):

So one use case that I think is phenomenal is having it scrub pitch books for compliance. And I would far rather have a rules-based AI bot reading my compliance decks and flagging the things that banks are out of bounds, and then having the compliance attorney step in and say, let me actually read this. Then having those poor guys try to read how many thousands of pitch books and flagging everything because they don't have the timer, the mental space to be able to apply discretion to actual things that are flagged. So I think that's a great instance of actually having, giving people in jobs that require a lot of information, processing a narrower window to look at things and they can apply a much more creative and critical eye to those. So I think that's a win for those teams.

Brian Heimer (17:01):

Any other questions from the audience? What's your book?

Anne Lester (17:04):

My book, thank you for asking. Yeah,

Brian Heimer (17:07):

I want to know what the title is. What

Anne Lester (17:08):

Oh man, it's, it's been frustrating. But the current working title we have gone through three or four is my first title actually, which everybody hated was Money, fear, greed and Death, why No One Saves For Retirement. But that was seen as a little bit of a bummer. So I think it's true, but nobody liked that. So then I went through Save A Boss Future Proof, and the current title is Your Best Financial Life now the Gen Z and millennial guide to So, but it's painful, very painful. The Chat GPT titles were all worse though.

Brian Heimer (17:43):

What Give us one of the best worst ones.

Anne Lester (17:48):

Oh, I mean, I was so repelled by them, I just went, ugh. But they were all the clickbait, 10 worst things, 10 best things, five secrets to.

Brian Heimer (17:59):

And then you kind of run into a TikTok scenario, right? I mean, you were talking about how we can use chat GPT to save time and to reach people. And if we wind up in a situation where we are getting the 10 best, the 10 worst that, is it any different than a FIN influencer? Are we going to be like, is chat GPT run the risk of being the best influencer out there?

Anne Lester (18:27):

I am on TikTok and I got videos out there,

Brian Heimer (18:31):

But you have credibility.

Anne Lester (18:32):

You have to show up where people are, right? And it's a fine line between topics and the vehicle for your expression of your ideas to be accessible to the people in a form that they want to consume and then not liking what you end up with. And that's a line I walk every day, honestly.

Brian Heimer (18:54):

Yeah, no, I don't think there's anything wrong with reaching people on TikTok. I just think that the way many the bad word influencers go about it is through Hocking advice that isn't necessarily advice that people should be taking.

Matt Reiner (19:11):

I mean, think you run into that with any innovation, right? There's a balance between the pros and the cons, and you are always going to have the people that are going to use it to the detriment of sometimes society, detriment of people and sense of that nature. But I think that the overarching, it gets back to also why I believe that as an industry we need to be earlier adopters of it than later adopters of it so that we can try to control some of that narrative. What Bloomberg's doing, I know that Morgan Stanley is doing something with open AI and getting information out there that's credible, reliable information that is utilized in the algorithm helps to hopefully mold the algorithm as opposed to react to the algorithm.

Brian Heimer (19:54):

I was in a session earlier today and someone said, wealth management is always 10 years behind when it comes to technology and you are trying to get people who are younger to save. Now, do we run the risk of being are, if we are 10 years behind with AI and chat GPT, do we run the risk of missing those people and what? I will just leave it at that.

Anne Lester (20:19):

I don't think so. I mean, to me, chat GPT have to say that five times fast AI is a means to an end. It's not the end. So to me, does it help you make your message more compelling? Does it help you reach your audience more effectively? And I don't see why being late to adopting that is necessarily going to help or hurt. I guess we will see if content that's created with view to solely with a view to optimizing eyeballs or optimizing, whether the algorithm likes me or not is going to really win out. But I guess I have to think that people at the end of the day don't have an endless capacity to be fooled by suboptimal content. Certainly it's going to get some eyeballs, but I think at the end of the day, people will gravitate to better quality advice however they get there. And certainly I think there are plenty of people out there who are trying to do the best of both worlds, which have some really good content, but also make sure that it's accessible and available and will get picked up. But like I said, it is a constant kind of battle that you face.

Matt Reiner (21:31):

I think it's natural human tendency that when you have a life event, a major life event, you want to talk to a human still, I think that there's not going to go away. And from that standpoint of losing out on those millennials or those Gen Xers or Gen Zers or whatever it may be, because we are behind on that, I don't think we lose out on that because they'll eventually come to it. I think that where we lose out on it is the evolution of what our value is to the industry, and I think that that's more of it, as opposed to losing out to them as clients in the future. I think it's more about the value in the services that we are going to be able to provide.

Brian Heimer (22:04):

I think that wraps us up. I want to thank our panelists Anne, Matt, thank you so much for your time, for your expertise here and in the panels, in the talks that you've given so far at Invest. Thank you so much. Thank you.

Anne Lester (22:17):

Thank you.

Matt Reiner (22:17):

Thank you.